LG Display's latest innovation is to bake the capacitive touch sensors directly into the LCD layer; eliminating the need for a dual-layer two part display. In the short term this approach will allow for minor space savings and some power savings, as well. The downside is that the complexity of merging the two layers into a single layer means higher costs and decreased output.

Han Sang-beom, chief executive of LG Display, is quoted byReuters, "We just began mass production and we don't expect any disruption in supplies."

One thing that may help LG Display from a supply perspective is that overall flat panel demand has been weak this year. Despite that weak demand, LG Display managed to grow its revenue by 14 percent on a year-to-year basis in Q2. But due largely to a $175M USD settlement in a U.S. price-fixing lawsuit, LG Display still was hit with a 112.3B won ($99.2M USD) loss in Q2 2012 versus a 21B won ($18.6M USD) profit a year ago. The price fixing lawsuit is actually not the first time LG has been implicated in criminal collusion; LG executives were actually sentenced to prison time back in 2009 for a similar conspiracy.

It's critical for LG to continue to grow and execute in the wake of its latest legal setbacks.

There is a small degree of uncertainty whether the new display will be destined for the iPhone 5, or whether Apple will horde stock of the display for a later model. That uncertainty large stems from the fact that rival display manufacturer Sharp Corp. (TYO:6753) said earlier this month that it would be shipping displays used in a next generation iPhone. Sharp is smaller than LG Display and uses a slightly different technology named "Advanced Super V" displays. Sharp's latest displays are also incorporating in-cell technology.

The new display tech is likely destined for the new iPhone. [Image Source: LG Display]

LG Display's biggest rival is Samsung Display, the world's largest display manufacturer and one of the only companies to have solved the riddle of the expensive and difficult AMOLED-based display process. Samsung Electronics Comp., Ltd.'s (KSC:005930) Galaxy S III smartphone showcases a gorgeous 4.8-inch diagonal display, a major selling point.

The iPhone, long stuck with a small 3.5-inch display, is reportedly headed for an upgrade to a 4-inch diagonal unit (30 percent more surface area), in Apple's bid to keep up with Samsung.